X API Ban Sparks InfoFi Crash — KAITO & COOKIE Plunge ~20%
X (formerly Twitter) revoked API access on January 15, 2026 for apps that financially reward posting, targeting so‑called “InfoFi” platforms that incentivize user content. X product lead Nikita Bier said the ban was aimed at apps that generated AI reply spam and degraded user experience. The policy change immediately forced major InfoFi projects to halt or pivot: Kaito removed its Yaps rewards and leaderboard and moved to a paid, creator‑selection model (Kaito Studio); Cookie ended Snaps rewards and refocused on B2B analytics and AI market‑intelligence; XEET and Pulse suspended operations. Markets reacted sharply: KAITO fell about 20% within hours (from roughly $0.70 to below $0.55), COOKIE dropped ~13–20% in the same window, and related NFT floors (Yapybaras, Quack Heads) plunged. The episode exposed the fragility of Web3 projects that rely on centralized social platforms for distribution and acquisition. Analysts expect a migration toward on‑chain reward mechanisms and decentralized social stacks (Farcaster, Lens, Base App), plus exchange‑hosted community hubs. For traders: expect heightened volatility in InfoFi tokens and related NFTs, watch token liquidity, on‑chain activity, and formal pivot plans as recovery signals, and monitor moves toward decentralized verification or alternative user‑acquisition channels. This is not trading advice.
Bearish
The news is bearish for the tokens explicitly tied to InfoFi projects (KAITO, COOKIE) because X’s API ban immediately removed a primary distribution, verification and rewards channel. Short term, that triggered rapid sell‑offs as liquidity providers and retail holders priced in operational disruption and uncertain pivots. Related NFTs also fell, eroding collateral and market confidence. Medium term, projects that can quickly demonstrate credible pivots—on‑chain reward mechanisms, alternative verification methods, or integrations with decentralized social stacks—may recover some value. However, many InfoFi models were effectively “parasites” on centralized platforms; until projects prove sustainable, market sentiment and volatility will likely remain negative. Traders should look for on‑chain spikes in token transfers, major liquidity withdrawals, official roadmap updates, and any quick partnerships with decentralized social platforms or exchanges as indicators of stabilization or further downside. This analysis focuses on direct price impact for the mentioned tokens and does not constitute trading advice.